KARACHI, Oct 22: A brisk trading was witnessed on the cotton market on Saturday as both spinners and mills made an extensive buying at the prevailing rates amid fears of a short crop.
About 20,000 bales changed hands, including some big deals, reflecting the spinners’ thrust to grab the floating stock points to higher export sales of textiles and an interrupted flow of fresh buying orders from the foreign buyers, brokers said.
“Mill demand is still far below an actively traded session,” they said. “In the middle of the cotton season backed by a good crop, the spinners and mills together lift about 50,000 to 0.1m bales daily from both ginneries.”
The spinners still have to go a long way but are treading cautiously in an apparent effort not to fuel a price flare-up which could upset their export parity levels. ”But they have the capacity and will to go to that figure,” some others said.
Moreover, while operating on the local market they have an eye on the world prices, which could directly or indirectly hit the local market, they said.
The market will remain unsettled until the current confusion about the crop size is cleared and the spinners are keeping a check on their daily offtake and are not panic with the future supplies of lint.
However, some of them are worried over the recent steep increase in New York cotton futures, which could make import of lint more expensive if they have to fill the local supply gap, market sources said.
New York cotton futures were quoted higher by 1.28 and 1.17 cents per lb at 54.49 and 56.42 cents for both the ruling December and the forward March contracts, respectively, on speculative buying aided by reports of a short US crop and higher export sales.
Bulk of the business was again remained confined to the Punjab type and most of the deals were finalized between Rs2,375 and Rs2,400.00, about Rs25 higher than the overnight rate, they said.
But on the other hand, most of the deals in the Sindh variety were done between Rs2,200 and Rs2,2,350 depending on quality, they said, adding that the spinners are trying to grab the floating stock of fine lots for higher counts of cotton yarn and for mixing with polyester fibre to produce blended yarn and cloth for foreign buyers.
Official spot rates on the other hand remained pegged to the last level of Rs2,325 per maund, but most of the deals in the ready section were done well above them.
The following are some of the notable deals, which went through on Saturday:
SINDH VARIETY: 1,000 bales, Sanghar at Rs2,200 to Rs2,225; 200 bales, each Bandhi and Sarari at Rs2,300; 1,000 bales, Tando Adam at Rs2,250 to Rs2,285; 800 bales, Nawab Shah at Rs2,325 to Rs2,350; and 1,000 bales, Shahdadpur at Rs2,300 to Rs2,325.
PUNJAB TYPE: 2,000 bales, Bahawalpur at Rs2,350 to Rs2,400; 1,000 bales, Khanewal at Rs2,375 to Rs2,400; 1,000 bales, each Garma Raja and Gojra at Rs2,350 to Rs2,375; 2,000 bales, Jahania at Rs2,400; 1,000 bales, Alipur and 1,400 bales, Ahmedpur East at Rs2,375 to Rs2,400; 800 bales, Chichawatni at Rs2,350 to Rs2,375; 600 bales, Fazalpur at Rs2,350; 600 bales, Liaquatpur at Rs2,360; 400 bales, Kabirwala at Rs2,360; and 400 bales, Uch Sharif at Rs2,400.